Tuesday, March 29, 2011

Land Value Tax by any other name? FT today

The Financial Times today reports on what Nick Clegg (UK Lib-Dem leader) calls a 'liberal tax system' which 'rewards work and enterprise and caputures pollution and unearned wealth'. Aricle: Tensions emerge in coalition over taxing the rich. The Coalition government wants to cut the 50p tax rate for high earners and Clegg's idea is to tax high value properties  annually to cover the shortfall. A kind of high rated Council Tax.

A Q&A feature points out that:
1. Property cannot move offshore to avoid the tax
2. The guess for the 50p tax rate yield is £2.5bn
3. A top property tax might yield £2bn
4. No property tax was mentioned in the budget so little preliminary work is being done to check it out.
5. Buying property  through a company may get round existing stamp duty, and anti-avoidance detection work is complicated.

The leading editorial champions the same cause Tax Britain's high value houses
Funding a cut in income tax through a higher tax on wealth is therefore a good way to reward, and encourage work....foreign onwers of UK property who benefit from British amenities but pay nothing towards funding them. An annual tax on property values is also preferable to the existing regime of taxing only property transactions. 
About elderly people with large houses:
the duties accrued could ... be deferred and paid at death.

You can comment on the leading article above on the FT website.

posted by Charles Bazlinton

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